Moog Proxy and Notice and Access Letter- FY2019 Filed 12 30 2019 - Page 19

The Role of Shareholder Say-On-Pay Votes
The Company provides its shareholders with the opportunity to cast an advisory vote every three years on its executive
compensation program (referred to as a “say-on-pay proposal”). At the Company’s Annual Meeting of Shareholders held on February
14, 2018, approximately 97% of the votes cast on the say-on-pay proposal at that meeting were voted in favor of the proposal. The
Executive Compensation Committee believes this result affirms shareholders’ support of the Company’s approach to executive
compensation, and therefore maintained this approach in fiscal 2019. The Executive Compensation Committee will continue to
consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the NEOs.
The main objective of the Company’s executive compensation program is to provide a compensation package that will attract,
retain, motivate and reward superior executives who must operate in a highly competitive and technologically challenging
Moog seeks to do this by linking annual changes in executive compensation to overall Company performance, as well as each
individual’s contribution to the results achieved. The emphasis on overall Company performance is intended to align the executives’
financial interests with the interests of shareholders. Moog also seeks fairness in total compensation with reference to external
comparisons, internal comparisons and the relationship between management and non-management remuneration.
The Company’s executive compensation program aims to take a balanced approach. On the one hand, we recognize that
near-term shareholder value can be created by the achievement of near-term results. To reward near-term success, annual salary
increases are linked to market rates and individual job performance, and the STI payments reflects annual increases in EPS and
FCF conversion. These targets are independent of each other and the payment received under the STI plan ultimately depends
on performance against these two criteria. "On target" performance would be EPS growth of 10% and FCF conversion of 100%.
The STI is comprised of a cash and stock element, typically paid out in a ratio of cash to stock of 2:1. On the other hand, the
Company’s business, particularly in aerospace and defense, requires that executives make decisions and commitments where
benefits, in financial terms, take years to develop. The LTI awards are intended to reward long-term success and to align executives’
financial interests with those of long-term shareholders through the award of PSUs in conjunction with SARs under the 2014 LTI
Plan. The PSUs vest conditionally based on a three-year performance period, using total sales and operating margin targets.
The Company believes that its total executive compensation program maintains alignment between both short and long term
incentives and Company performance and the interests of shareholders. The metrics selected for linkage to these plans were
chosen because of their profile within the Company as key performance indicators.
The Executive Compensation Committee
The Executive Compensation Committee of the Board is composed solely of independent, non-employee directors. The
Executive Compensation Committee meets to determine CEO compensation, and has final approval on all elements of officer
compensation. Any changes in benefit plans which affect executive officers are presented to the Executive Compensation Committee
for review and approval, prior to presentation to the entire Board.
For fiscal 2019, this committee was comprised of the following members:
William G. Gisel, Chair
Peter J. Gundermann
R. Bradley Lawrence
Brian J. Lipke


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